No matter what kind of game you play, any stakes higher than zero change the nature of the game.
If you play for virtual points, it's no more than a freetime activity. You can play to win, but your reward is no more than the knowledge that you won. You can play very casually as well with no true regards towards who wins. You can play for the sake of playing without any losses involved.
As soon as higher stakes get involved, there's a chance to lose as well as a chance to win. Just the possibility to lose something changes the game from a casual activity to a risk. Suddenly players are forced to invest much more energy and thought to minimize the risk.
From a psychological perspective, a risk to lose something is almost always perceived more negatively than no chance to win anything. In psychology this effect is called "risk aversion".
Risk aversion is the behavior of humans (especially consumers and investors), who, when exposed to uncertainty, attempt to lower that uncertainty. It is the hesitation of a person to agree to a situation with an unknown payoff rather than another situation with a more predictable payoff but possibly lower expected payoff.
Your players prefered the certainty of not winning anything to the risk of having to buy the winner a dinner.
A second aspect could have been that there can only be one winner, but several losers. For each individual person, the chances of being the winner were much lower than the chances of being one of the losers. Many people perceive losing something as much more negative than not gaining the same something. This effect is called "loss aversion".
loss aversion refers to people's tendency to prefer avoiding losses to acquiring equivalent gains: it is better to not lose $5 than to find $5.
If you want to revive the game and the people playing with you are the casual type who don't play for the thrill, you should increase positive incentives instead of introducing negative consequences.
Variants that do not include winning anything are:
- Increasing the fun by introducing custom rules or giving players more chances to laugh.
- Increase the impact of pure luck on the game (so everyone can win regardless of skill and concentration).
- Play a different game that more people are interested in.
Variants that include higher stakes are:
- Offering an imaterial reward like "The winner decides where we'll eat out next time or what film we'll watch next time".
- Offering items from a predefined pool as wins (like small coins, sweets or drinks). Setting up this pool of wins is an initial loss (probably for you), but eliminates the risk of losing anything for the players.
- Having the loser pay an imaterial price like the typical "truth or dare": the loser has to tell an embarrassing story or do something harmless but unpleasant.